I'm Audie Cornish, and we begin the hour with the threat of a de facto Islamist state stretching across parts of Iraq and Syria. The Iraqi government has now lost control of one of its biggest cities, Mosul, to extremist Sunni militants. The group is known as ISIS, which stands for the Islamic State of Iraq and Syria. ISIS has been rejected as too extreme, even by some leaders of al-Qaida.

BLOCK: The ISIS militants control parts of northeast Syria and they've been waging a month's long war in neighboring Iraq, gaining ground steadily. Now, ISIS fighters have apparently routed government troops in Mosul. They've taken over civic buildings and prisons, putting them in control of a sprawling commercial hub and provincial capital.

CORNISH: We're joined now by NPR's Alice Fordham who covers Iraq, and is now in Beirut. And Alice, what more have you learned what's going on in Mosul?

ALICE FORDHAM, BYLINE: Well, the latest is that militants are in control of much of the city. They've taken over the provincial council, army bases, police stations. We've seen footage of army bases abandoned, smoldering. As far as we can tell, most of the security forces have fled. The governor has confirmed this. In fact, he blamed the security forces for running away and not being prepared. About 500,000 people have been displaced over this weekend, according to the International Organization for Migration. And the acting Prime Minister Nouri al-Maliki has called for a state of emergency.

BLOCK: 500,000 people displaced. Where are they going?

FORDHAM: Yeah, we saw photographs over the weekend of people streaming out of the city with their children, and a few possessions in their arms on foot because there was a vehicle curfew - wasn't allowed to take your car. A lot of them are trying to get to Erbil, which is in the Kurdish part of Iraq. It's safer. But people are telling me that not everyone is being allowed into that area and I think were seeing a buildup of possibly hundreds of thousands of people at the border. There's also talk of building camps in this Kurdish area, an indication that people think this problem isn't going to go away anytime soon. They've already had to build camps there for one lot of people who've come in from Syria, on the other side of the border, escaping the war.

CORNISH: Alice, you've done a lot of reporting in and around Mosul, and you've reported on the vast extortion rackets ISIS had there. What was the lead up to this big advance by ISIS today?

FORDHAM: Yes. They had a very entrenched presence in Mosul. They ran the city like a piggy bank, with brute force and assassinations of people who didn't comply with their demands for money. But they hadn't run it, as we've seen that they've run some of the territory in their control, particularly cities in Syria, where we see this very extreme version of Islamic law - crucifixions, hangings, amputations for people who don't obey their version of the rules. So it seems that now they've really taken control in Mosul, seizing ground, emptying arms caches there.

CORNISH: And you mentioned Syria. Help us understand the connection.

FORDHAM: Well, as you said, ISIS stands for the Islamic State of Iraq and Syria. The stated goal of the organization is to erase the borders between those two countries and create one big Islamic state. They already hold parts of Syria. They've been able to take advantage of the civil war there to seize territory. And taking Mosul, taking this big chunk of Iraq, is a big step towards this greater Islamic state of Iraq and Syria that they want to rule over.

CORNISH: So tell us about their gains. I mean, how much turf does ISIS control these days?

FORDHAM: Well, it's been really growing. They hold parts of Syria, although there has been some pushback there. They hold much of Western Iraq, including the city of Fallujah. And there are big questions for the United States here. My colleague Deborah Amos spoke with one analyst, Charles Lister, today and he says this really calls into question the U.S. strategy in the region. The state has been backing the Iraqi government, saying that it was helping them get a handle on the problem, sending them weapons. But this is clearly going to require a reassessment on whether the Iraqi government is capable, even now, as it fumbles its way towards government formation, not very quickly, after an election in April.